Chevron receives go-ahead for $5.1 Billion Gorgon Expansion Project

April 18, 2018

Chevron are proceeding to the second stage of the $54 billion Gorgon gas project.

Gorgon LNG expansion project is the second part of the Gorgon development plan, which includes the expansion of the existing subsea gas network required to maintain long-term natural gas supplies to Barrow Island.

Chevron is the chief operator of Gorgon LNG project holding a 47.3 per cent stake. Exxon Mobil Corporation XOM and Royal Dutch Shell PLC RDS.A own 25 per cent interest each. The 2.7 per cent remaining stakes are held by three Japanese companies, Osaka Gas, Tokyo Gas and Chubu Electric Power.

Gorgon LNG is located about 150km north of Onslow in Western Australia’s north- west coast. The project is, to date, the largest single resource project in Australia. It is also one of the costliest project ever undertaken at $69 billion, employing more than 10,000 workers to construct the processing facility located at Barrow Island.

The existing Gordon LNG project currently has a shipment capacity of 15.6 million metric tons per year. To put this figure into perspective, Shell recently estimated that global LNG demand would reach 293 million tons.

Chevron has reported it will drill 11 new wells in the Gorgon and Jansz-lo offshore fields. Drilling is expected to start next year, with the full expansion predicted to take a total of four years. From the 11 new wells, seven will be drilled thousands of meters below sea level in the Gorgon field. The remaining four wells will be sunk in the Jansz-Io field, roughly 44 miles (70km) further out to sea.

In addition to the 11 new wells Chevron and its joint venture partners will also be building offshore pipelines and subsea structures to pipe the gas to the nearby LNG plant on Barrow Island

The expansion of the Gorgon LNG project involves an estimated capital investment of around $5.1 billion and will be creating a boost in job opportunities in Australia. Chevron’s planned annual investment for the second stage of the project is known by industry experts to be $18-20 billion through 2020.

The Gorgon project shipped its first gas cargo two years ago in 2016 and is predicted to have a lifespan of 40 years. The expansion of the project is likely to boost the domestic supply of gas from 200 terajoules to about 300 terajoules a day.

Gorgon LNG project was one of Mentor IMC’s biggest ever project with over a hundred professionals supplied to the project. Mentor IMC staff supported throughout the duration of the project, from supporting the original design from the UK based office, to the major construction phase.